Sidney Morris & Co. v. NATIONAL ASS'N OF STATIONERS, ETC.

• Decision Date: 23 April 1930
• Docket Number: No. 4232,4233.,4232
• Citation: 40 F.2d 620
• Parties: SIDNEY MORRIS & CO. v. NATIONAL ASS'N OF STATIONERS, OFFICE OUTFITTERS & MANUFACTURERS et al. (two cases.)
• Court: U.S. Court of Appeals — Seventh Circuit

40 F.2d 620 (1930)

SIDNEY MORRIS & CO. v. NATIONAL ASS'N OF STATIONERS, OFFICE OUTFITTERS & MANUFACTURERS et al. (two cases.)

Nos. 4232, 4233.

Circuit Court of Appeals, Seventh Circuit.

April 23, 1930.

Benjamin C. Bachrach, of Chicago, Ill., for appellant.

Isaac B. Lipson, of Chicago, Ill., for appellees.

Before EVANS, PAGE, and SPARKS, Circuit Judges.

EVANS, Circuit Judge.

No. 4232. This appeal brings up a judgment dismissing appellant's complaint because of its alleged failure to state a cause of action. A demurrer to the complaint was sustained. Appellant elected to stand upon its complaint, whereupon a judgment of dismissal was entered. The alleged cause of action is traceable to provisions of two sections, 13 and 15, of title 15, USCA, commonly known as the Clayton Act.

No. 4233. This appeal reviews a decree that dismissed a bill wherein injunctive relief was sought upon stated facts similar to those appearing in 4232. The relief here sought is traceable to the provisions of section 26, tit. 15, USCA. The bill herein, like the complaint in 4232, was dismissed because of its alleged failure to state a case which entitled the complainant to the relief sought.

Both appeals will be disposed of in one opinion.

4232. Plaintiff alleged that it was, and is, an Illinois corporation engaged in the business of selling at retail and wholesale all manner and variety of stationery, office fixtures, and office equipment, hereafter called office equipment, and was, and is, engaged in commerce among the several states of the United States as commerce is defined in title 15, USCA; that defendants are corporations and individuals or associations engaged in the business of manufacturing and selling office equipment, and were engaged in commerce among the several states during the periods when the acts complained of were committed.

Plaintiff divided the 104 defendants into three groups. The largest is group one, consisting of some seventy defendants. Group two consists of twelve or more defendants and group three consists of seventeen defendants. Group one, excepting two associations, are alleged to be wholesalers, retailers, and manufacturers and dealers in office equipment. Defendants comprising group two are manufacturers, jobbers, and wholesalers of office equipment. Defendants described in group three are retailers of office equipment.

It is further stated that all of the defendants are members of the National Association of Stationers, Office Outfitters and Manufacturers, and that defendants in group two were, and are, members of the Wholesale Stationers' Association of America, both of which associations are made defendants. Defendant Gibbs is general manager of one association and defendant Ogren is in charge of the Chicago office of this association.

It further appears from the complaint that for many years plaintiff was a purchaser of office equipment from the defendants comprising group two as well as from other manufacturers, wholesalers, and jobbers; that the wholesale prices were ascertainable from certain lists, catalogues, and statements of prices occasionally published and distributed by defendants in group two; that through such publications defendants comprising group two published and represented throughout the United States that they would sell at all times their commodities to whomsoever would buy the same at the prices so listed, and such prices were uniform; that plaintiffs purchased merchandise from said defendants according to the aforementioned method of doing business. Further allegations appear to the effect that defendants mentioned in group one and others organized what is known as the National Association of Stationers, Office Outfitters, and Manufacturers and named certain individuals officers and managers and directors of said association; that all defendants are charged with having caused to be organized certain voluntary organizations where there was a center of distribution of office equipment, which local associations were managed and controlled by officers and directors chosen from the general membership. Plaintiff further alleges that defendants mentioned in the three groups from time to time fixed, issued, published, and promulgated certain recommended retail and resale price lists which purported to state prices at which articles should be resold by retailers.

The complaint alleges that the members and the officers and the directors of the defendants mentioned in group one and the defendants in group two and three were engaged in selling the same kind of merchandise as plaintiff; that defendants in group one and three agreed together to maintain the retail price so published and declared by them, and that thereafter at various times members of all three groups and their officers and agents insisted that plaintiff desist from its practice of reselling said office equipment at less than the published resale prices; that defendants demanded that plaintiff become a member of the National Association and pay the said association the regular initiation fees and dues. Plaintiff alleges its refusal to join the association or to agree to maintain the resale prices fixed by defendants, and further alleged that it sold articles at prices lower than said listed resale prices, and that defendants thereupon conspired and agreed together to injure the plaintiff in its business and property, which said injury was to be accomplished by the defendants in all of the groups in the following manner: (a) By intimidation and by unlawful inducements on the part of defendants in all groups. (b) By refusing to sell, and causing defendant manufacturers of office equipment to refuse to sell plaintiff its needed merchandise. (c) By refusing and causing various manufacturers, wholesalers, and jobbers of office equipment to refuse to sell plaintiff its necessary merchandise. (d) By defendants refusing and causing various manufacturers, wholesalers, and jobbers to refuse any longer to sell plaintiff said merchandise at prices as low as they were selling, and did sell, to other persons engaged in the same business.

Plaintiff then set forth eighteen overt acts by which damage to plaintiff was disclosed. General damages are alleged and facts are set forth disclosing damages suffered by plaintiff as the direct result of its inability to buy the merchandise excepting at much higher prices than it would have been compelled to pay had it joined the association and maintained resale prices.

The relief sought was a money judgment.

Numerous demurrers were filed, some general and others general and special. Without stating its reasons, the court sustained all the demurrers.

Appellees argue: (1) The gist of the action is conspiracy. The Clayton Act is not a conspiracy act and therefore the cause of action is not one condemned by the Clayton Act. (2) Even if conspiracy came within the purview of the act, the declaration fails to state a cause of action for conspiracy. (3) The complaint fails to show that it was illegal for the manufacturers in question to refuse to sell or allow discounts to plaintiff. (4) The complaint fails to show that the acts complained of had the effect of substantially lessening competition or tended to create a monopoly within the meaning of the Clayton Act. (5) Complaint fails to show plaintiff was damaged by defendants' refusal to sell it the desired merchandise, because no monopoly is shown and it does not appear that plaintiff was unable to procure like merchandise from other sources. The fact that the manufacturers' brands were well advertised does not change the situation. (6) The Clayton Act only applies to discriminations and monopolies "in any line of commerce." Plaintiff's grievance is not limited to a single line of commerce, but to numerous and distinct lines. (7) The complaint is bad for duplicity, in that it joins several causes of action in one count, and because it joins in one count a cause of action based on the violation of the statute and a cause of action based on common law. (8) A large number of persons are jointly sued for the commission of torts which are clearly several. Included among the defendants are numerous persons who could not be sued under the Clayton Act, to wit, two trade associations not engaged in commerce and individuals not engaged in commerce and that a declaration against two defendants for a cause of action against only one of them is demurrable.

Do the conspiracy allegations appearing in the complaint take the case out of the Clayton Act?

The four pertinent sections of the Clayton Act read as follows (USCA title 15):

12. The word `person,' or `persons,' wherever used in sections 12 to 27, inclusive, of this chapter shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country."

13. "Discrimination in price between purchasers. It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities, which commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly in any line of commerce: Provided, That nothing herein contained shall prevent discrimination in price between purchasers of commodities on account of differences in the grade, quality, or quantity of the commodity sold, or that makes only due allowance for difference in the cost of selling or transportation, or discrimination in price in the same or different communities made in good faith to meet competition: And provided further, That...